TCF Bank's closing of Iranian students' accounts is questioned

Amir-Pouyan Shiva is one of at least a dozen University of Minnesota students who received notice that TCF Bank will soon close their accounts. What do those students have in common? They’re from Iran, studying in the United States with student visas.

University of Minnesota student Amir-Pouyan Shiva got the letter just before New Year's: TCF Bank would be closing the account he and his wife had maintained for five years.

"This letter is to notify you that TCF is exercising its right under the terms of your account contract to discontinue our banking relationship," the Dec. 26 letter begins.

Shiva, a Ph.D. student in anthropology, asked around and quickly realized he was not alone. About a dozen students have reported receiving the letter, according to one U official. Shiva counts more. All of them have one thing in common: They're from Iran.

"We're just ordinary students," said Shiva, who is here on a student visa. "It's not fair."

The university's agreement with TCF Financial Corp. grants the Wayzata-based company the exclusive right to offer checking accounts linked to the university's photo ID cards. Nearly 30,700 students and employees have signed up, worth about $1 million a year in royalties, which the university puts toward student programming and scholarships.

A TCF Bank spokesman said the letters -- sent to other customers and "not just foreign students" -- were triggered by its investigations into transactions that might have violated federal sanctions. They're part of its regular monitoring, required by law, of more than a million checking accounts, said spokesman Jason Korstange.

He wouldn't elaborate on how the transactions allegedly violated sanctions. The U.S. government has a long list of rules and procedures governing transactions that involve Iran as part of its sanctions over the country's alleged pursuit of a nuclear weapons program and state sponsorship of terrorism.

The bank has encouraged the students to call a number or visit a branch. "If indeed the transactions can be explained," Korstange said, "then we'll keep the account open." Shiva, for one, visited a bank on Monday to see if he could work things out.

'A concern'

The university was surprised by word of the letters. "Given our relationship with TCF Bank, we would have expected that TCF representatives would have communicated with us ... prior to students receiving the letter," said university spokeswoman Patty Mattern. "That's a concern we've shared with them."

Shiva and other students approached Prof. William Beeman, who found the bank's explanation "implausible."

"The students have compared notes," he said. "Many of the students have had no money transfers at all. They have not had their accounts overdrawn. Their banking record is spotless.

"The irregularity might be that they're Iranian."

But Korstange said that the bank has "absolutely not" targeted international students and that "there were plenty of Iranian students at the university who did not get this letter." The bank must constantly remain vigilant, he said, responding to a long list of federal requirements.

A spokesman with the U.S. Treasury Department declined to comment on the specifics without knowing more about the accounts. Generally, "we expect banks to practice due diligence in order to adhere to the appropriate laws," said spokesman John Sullivan. "That being said, the focus of our sanctions program is on the Iranian government and its illicit activities, not students who are legally studying in the U.S."

'Challenging situation'

Korstange acknowledged that the letter "was probably not perfectly written" and should have included a process to contest the account's closure.

Barbara Kappler, assistant dean of international student and scholar services, said she met with nine students last week, to discuss options, including opening accounts with other banks.

"I'm concerned for the students," Kappler said. "They have found this to be a challenging situation, understandably."

The university's Twin Cities campus has 67 students from Iran. Most are working on Ph.D.s, Mattern said.

The National Iranian American Council has increasingly heard reports from Iranians and Iranian-Americans who've had their bank accounts closed or were blocked from opening them, said policy director Jamal Abdi. But "never on such a systematic level," he said.

The nonprofit council, based in Washington D.C., opposes broad sanctions "that punish ordinary people," according to its website, in favor of more targeted ones.

"The pattern we're seeing is private companies judging that it's not in their interest to do any business that is any way related to Iran," Abdi said. "This over-enforcement or mis-enforcement of the sanctions is actually leading to discrimination."